Sentara sends Anthem contract termination notice, effective Jan. 1

Nearly 380,000 Anthem members in Virginia could lose in-network access to Sentara Health beginning Jan. 1 if the health system and insurer fail to reach new agreements before several existing contracts expire at the end of the year.

The Hampton Roads-based health system on Friday announced it had sent Anthem Blue Cross Blue Shield of Virginia a formal notice of intent to allow certain commercial, Medicare and Medicaid agreements to expire if a new agreement cannot be reached. Sentara said it is committed to continuing to negotiate toward a resolution and that the notice of termination is a “standard contractual step” that doesn’t preclude the parties from reaching an agreement.

“Our team has been dealing with these negotiations for almost eight months, and we have been unable to get Anthem to agree to anything close to rates that will allow us to support delivering the care in Hampton Roads and across the state that we’ve enjoyed over the last few years,” Sentara Executive Vice President and Chief Administrative Officer Aubrey Layne said in a media briefing Friday.

According to Layne, Sentara proposed a 6.2% pay increase for 2027, to help offset inflation, a reduction in federal funding and rising medical costs. Layne said Anthem countered with a 1% decrease, which he said was “just not acceptable to us.”

In a statement, Anthem spokesperson Kersha Cartwright noted that, for now, Anthem members can continue seeing their Sentara doctors and hospitals and will experience no changes to member coverage or access to care.

“We remain committed to reaching an agreement that protects access to high-quality, affordable healthcare for the members, employers and taxpayers we serve,” she said. “While we are disappointed that Sentara chose to make these negotiations public, our focus remains on reaching an agreement at the negotiating table.”

Layne said Sentara is a nonprofit that reinvests any excess revenue into patient care and community programs rather than distributing profits to shareholders.

“We do not have to answer the shareholders, and I think that’s part of what’s going on here,” he said. “Many of the people on the other side of the table that are making the decisions for this contract are not based here, and quite frankly, as a fiduciary responsibility, they are responsible to their shareholders as a for-profit organization.”

Sentara also alleges Anthem owes more than $105 million in charges for unpaid claims that are more than 90 days overdue and has refused to pay an additional $12 million related to a 2025 billing settlement. It also alleges Anthem has withheld another $4 million by systematically downgrading the severity of emergency department visits, resulting in paying Sentara for a lower level of care than what patients actually received.

Under the current agreements, Sentara said it will remain in-network for certain Anthem commercial and Medicare members through at least Dec. 31, and for Medicaid members through Jan. 28, 2027. Additional contracts expire on a rolling basis into 2027.

Regarding Sentara’s allegations about Anthem’s claims payments, Cartwright said Anthem Virginia pays approximately 97% of claims within 14 days and 99% within 30 days. She said claims extending beyond 30 days are typically part of the normal review and reconciliation process or require additional information.

Layne said the strained negotiations come at a time when hospitals are facing significant financial impacts and decreased reimbursements from H.R. 1, known as the “One Big Beautiful Bill” Act. President Donald Trump signed the budget reconciliation measure into law July 4, 2025. Among other impacts, the law will cut federal Medicaid spending by $911 billion over a decade.

Layne said the federal spending reductions are expected to significantly reduce hospital reimbursement, adding to financial pressures from inflation and rising labor and supply costs. Sentara estimates the law will reduce its revenue by about $700 million annually, which makes the contract negotiations “take on a lot more weight than they may have in the past,” he noted.

“What we believe we put on the table was very fair,” Layne said. “We didn’t ask for anything egregious in that regard, but we’re not going to be bullied by the fact that they have a larger scale than we do.”

Sentara said if Anthem members lose in-network access on Jan. 1, they will face higher out-of-pocket costs, disrupted care relationships and fewer choices.

Headquartered in Virginia Beach, Sentara is a roughly $14 billion integrated healthcare system with about 34,000 employees across the state. It operates 11 hospitals in Virginia and one in northeastern North Carolina. Its health insurance division, Sentara Health Plans, serves more than 1 million members across Virginia and Florida.

Elevance Health, Anthem’s parent company, reported approximately $197.6 billion in operating revenue, $5.7 billion in profit and about 45.2 million medical members nationwide in 2025.